JOIN USBetter to give jobs to the poor than give them money without work: T V Narendran
T V Narendran, newly elected president of the Confederation of Indian Industry (CII), suggests a Rs 3 lakh crore stimulus to deal with the second wave of Covid. His views about Universal Basic Income is a bit different. According to him, it is better to give jobs to the poor than to give them income without any work. He talks about the impact of the pandemic in detail with DH's Annapurna Singh. Excerpts:
Q. At CII, you were the first one to raise the pitch for a Rs 3 lakh crore stimulus package to deal with the second wave of Covid-19. What is your sense of the size of stimulus for the informal sectors of the economy?
A. The package suggested by CII includes informal sectors as well. These include cash transfers through Jan Dhan accounts, increase in support to farmers through PM-Kisan and greater allocation for the MNREGA programme. With the majority of the workforce employed in the informal sector, their wellbeing is extremely important for the overall health of the economy. Public works and construction projects create employment in the informal sector. Further, the travel and tourism sector, which employs may people in the informal sector, is facing tremendous distress. For the formal sector, our suggested measures are focused on the small and medium sector. We suggest expansion of the credit guarantee scheme (ECLGS) which has been working well for sustaining the MSMEs.
Q. This time, consumption in rural areas is also impacted. Steps to lift that up?
A. Many of the measures suggested above such as increased spending on MNREGA and PM-Kisan are targeted at rural areas. In addition, there should be more focus on vaccination as well as healthcare facilities in rural India. Public expenditure on health should be stepped up so that healthcare facilities are available in remote areas. Government should invite private sector to join hands with the district administration to set up hospitals with connectivity for digital healthcare provision. Special incentives could be provided for setting up medical facilities such as free land, deemed clearances and tax benefits.
Q. Inflation is raising its head once again. Fuel prices inflation will add more to it. Added to that, vaccine optimism has led global commodity prices to soar. What are the ways to tackle inflation and inflationary expectations of households?
A. It is likely that inflation will moderate from the high level of 6.3%, touched in May, as the lifting of lockdowns will ease supply bottlenecks. Food prices are especially affected by restrictions on movement. The unlock over June and July in most states will have a moderating impact on food prices. Further, a good monsoon leading to a good crop this year will keep food prices moderate. Fuel prices can be brought down by reducing the high level of central and state taxes. The Centre had increased excise on fuel products when the global prices had declined during the first wave but has not reduced them now.
Q. Certain businesses have been shut for ever. Migrant labourers are hesitant to come back to work due to an impending third wave of Covid-19. Poor are getting poorer. Jobs are less. In this scenario, do you also support a Universal Basic Income for Indians?
A. It is critical to get back growth which will generate jobs and livelihoods. It is also important to provide better facilities to migrant labourers. Many migrants chose not to go back in the second wave as they were taken care of by their employers. The affordable housing scheme initiated by the government for low-cost worker housing should be pursued. It would not be appropriate to comment on the UBI without knowing how much it would cost and whether it is affordable. I believe it is better to give jobs to the poor than to give an income without any work, as the former is more sustainable. We may also think about providing Universal Social Health Insurance so that healthcare costs are taken care of.
Q. Things that you suggest to the government to help create jobs at a faster pace and which sectors to tap first?
A. Companies in the tourism, aviation, hospitality sectors need auto-renewal of licenses without any fees for this financial year as well as waiver of any property taxes, licenses, fees etc. Waiver of statutory dues related to customs duties, excise fees, levies, taxes, power and water charges, across the tourism, travel, aviation, and hospitality industry is also required.
The registration for Aatmanirbhar Bharat Rozgar Yojana (ABRY) which had commenced from October 1, 2020, to incentivise employers for creation of new employment along with social security benefits and restoration of loss of employment during Covid-19 pandemic is closing on June 30, 2021. Since the impact of the second wave on the livelihoods has been very brutal, it is imperative that the registration for this scheme remains open till 31st March 2022.
Funding public infrastructure has been a tried and tested route of stimulus that not only creates demand for many industries but also creates jobs as well as improves long term productivity.
Q. Are you optimistic about India’s growth turnaround this fiscal if the vaccination programme achieves its target?
This year, we are operating in a supportive global environment where stimulus provided in all major economies has lifted growth. I am therefore optimistic that if we do not get into another wave of Covid infections, growth levels across sectors will start climbing. Of course, it is critical to achieve our vaccination target both to avoid another wave as well as to be able to restart economic activity.